Demand for labour remains buoyant

While most employers still intend to increase staff levels, and demand for labour remains buoyant, this confidence has yet to translate into significant salary for all but new starters and those with key skills, according to the CIPD spring 2019 Labour Market Outlook.

Pay - despite rising recruitment and retention pressures, median basic pay expectations in the 12 months to March 2020 remain at 2%. However, pay expectations have fallen back in the private sector from 2.5% to 2% and have risen in the public sector from 1% to 1.5%.

Recruitment - the LMO’s net employment balance – a measure of the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels – has increased from +20 to +22. Employment growth will continue to be driven by the private sector which has increased from +22 to +25 in the last quarter. The report shows that confidence is highest in business services (+39), construction (+36), healthcare (+31) and ICT (31%).

Skills - skills shortages are particularly being seen in professional occupations (e.g. scientists, engineers) where 50% of employers report that applicants don’t have the required level of skills needed. In response to skills challenges employers are having to rethink their recruitment practices and draw from a wider talent pool.